North West hotels lead UK profit growth

The chain hotels market review revealed that hoteliers in the North-West led the pack, with a 6.1% rise in revenue per available room (RevPAR) to £51.63. Room rates in the region increased by 3.7 per cent, while occupancy was up by 1.6 per cent.

Total revenue available per room (TRevPAR) saw an uplift of 3.8 per cent, and gross operating profit per available room (GOPPAR) increased by 5 per cent despite higher overheads per available room.

In December, North West hotels “recorded positive results across all key performance indicators with TRevPAR and GOPPAR figures contributing to enhance the overall performance,” said the report.

Nottingham also saw impressive GOPPAR growth of 11.4 per cent despite increased costs. Occupancy was up 4.9 percent for hotels in the city, although room rates slipped by 1 per cent.

RevPAR rose 6.6 per cent to £37.46 and TRevPAR was up by 5.9 per cent to £69.67 on the back of growth in food sales, beverage revenue and meeting room hire.

In December, RevPAR increased by 10 per cent for Nottingham hotels, but GOPPAR fell 8.5 per cent indicating “the importance of looking beyond rooms key performance indicators when assessing hotel performance,” the report said.

West Midlands​

In contrast, hotels in Greater London, the East of England, the North East and the West Midlands saw GOPPAR fall last year.

In line with the West Midlands results, Birmingham hotels saw increases in RevPAR and TRevPAR of 2.3 and 1.1 per cent respectively, but these were not translated into profits.

In fact, hoteliers in the city experienced a 1.6 per cent drop in GOPPAR to £31.30 as the result of a significant increase in overheads, with utilities and administration costs up by 7.1 and 6.9 per cent respectively. Payroll also increased by 0.4 per cent.

In December, overheads and payroll increased by 37.9 and 2 per cent respectively for Birmingham hotels, causing GOPPAR to plummet by 21.4 per cent.

London and Glasgow​

Figures released by business advisory firm BDO​ earlier this week suggested that London hotels enjoyed some improvement in December, with room yield up by 5.9 per cent to £95.44, driven by a 5.5 per cent uplift in room rate and a 0.4 per cent increase in occupancy to 76.2 per cent.

Separate figures from tourism market research specialists LJ Research revealed that Glasgow occupancy rates hit a record-breaking 71 per cent in December after seven consecutive months of growth.